Huawei Heads to Africa as Presence Falters in Asia, Europe
Huawei Technologies appears bent on capturing the Nigerian smartphone market via its Ideos smartphone, which it successfully launched in Kenya earlier this year. The company says it sold 60,000 Ideos phones in the country in the first half of the year, accounting for nearly 50% of all smartphones sold in the country.
According to The Wall Street Journal, Huawei will be spending about $1 million in an advertising blitz with the hope that Nigerians earning $2,000 a month or less will pick the Ideos as their smartphone of choice. This particular region in Africa is becoming a technology hotbed, and smartphones have proven to be the way of the future. These pocket gadgets are the first line of action for connecting individuals to each other, to services and to ads.
But implementing in a new country comes with its own unique set of obstacles. A retail outlet in Lagos indicated that the Ideos is sold at a premium in Nigeria. Starcomms is currently marketing the Ideos at about N24, 499 apiece (about $160), not the $100 price tag initially set by Huawei. This might prove problematic as the Ideos’ main appeal is in its affordability as a cheap smart phone option that can be purchased for $100 or less.
In addition, the inability to use Ideos with the GSM platforms in Nigeria might decrease the appeal of the phone’s value proposition. Currently Ideos users can only use the phone on Starcomms’ network. Huawei need to sign deals with Nigerian GSM operators to meet its goals for accessibility as well as price.
“Everybody wants to come to Nigeria. It would have been even better if Huawei had started this three years ago.” says Tolu Ojo, the chief executive of Telecgsm Ltd., which handles wholesale operations for handset makers and recently signed a deal to sell Huawei phones in Nigeria.
While Huawei might have trouble getting traction in Asia and Europe, Nigerians will take a chance on an unknown phone with a good camera, Internet access and the ability to run application. Huawei started selling a limited number of its $170 smartphones in Nigeria, in May.
“The African market presents enormous opportunities for Huawei and the telecommunications industry as a whole,” says a Huawei spokeswoman in China.
However, it seems that Huawei is not alone at the African market; the Chinese company is facing competition from some big mobile companies such as Samsung, Nokia, Apple and RIM, all with their own hardware strategy setting a foundation for a mobile software ecosystem.
By exploring different markets, Huawei is targeting $6 billion in revenue from global device sales, an increase from the $4.5 billion it drew in last year.
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